The IRS Fresh Start Program is a great way to get back on track with your taxes and finances. However, many people make common mistakes when using this program, which can lead to problems. To avoid these mistakes, it is essential to understand what they are and how to avoid them.

1. Not Filing Your Tax Returns on Time

One of the biggest mistakes people make when using the IRS Fresh Start Program is not filing their tax returns on time. This can lead to additional penalties and interest, making it even more challenging to get back on track with your finances. To avoid this mistake, file your tax returns on time, even if you can’t pay the total amount owed.

2. Not Applying for Installment Agreements

Another common mistake people make is not applying for installment agreements. An installment agreement allows you to pay your taxes owed in monthly installments rather than all at once. This can help make the payment process more manageable and can also help you avoid additional penalties and interest.

3. Not Disclosing All of Your Financial Information

When applying for an installment agreement, it is essential to disclose all of your financial information. This includes your income, expenses, and assets. Failing to disclose all this information can result in your installment agreement being denied or canceled.

4. Not Sticking to Your Installment Agreement

Once you have an installment agreement in place, it is important to stick to the terms of the agreement. This means making your payments on time, every time. If you miss a payment, you may be subject to additional penalties and interest, making it even more difficult to get back on track with your finances.

5. Not Updating Your Financial Information

If your financial situation changes, it is essential to update your financial information with the IRS. This includes changes in your income, expenses, or assets. Failing to update your information can result in your installment agreement being canceled and can also result in you owing more money than you thought.

FAQs:

• Can I still get an installment agreement if I have a past-due tax debt? Yes, you can still get an installment agreement if you have a past-due tax debt. However, you may be subject to additional penalties and interest if you have a past-due debt.
• How long does it take to get an installment agreement? The time it takes to get an installment agreement varies depending on the complexity of your case and the amount of taxes owed. However, the IRS usually processes installment agreement requests within 30 days.
• What happens if I can’t make my payments under an installment agreement? If you can’t make your payments under an installment agreement, you should contact the IRS as soon as possible. They may be able to work with you to modify your agreement or may be able to offer other payment options.

Conclusion: The IRS Fresh Start Program is a great way to get back on track with your taxes and finances. However, there are common mistakes that people make when using this program. To avoid these mistakes, it is essential to file your tax returns on time, apply for an installment agreement, disclose all of your financial information, stick to your installment agreement, and update your financial information if your situation changes. By avoiding these common mistakes, you can get back on track with your finances and avoid additional penalties and interest.